A VA loan is a system of lending that was built to help people who are in the military, who are military veterans, and people who are spouses of people in the military. There is a lot of misinformation about VA loans online, which is mostly spread by online scammers who are trying to exploit people in the military. So, here are six facts you should probably know about VA loans.
If you have okay-to-bad credit, then most High Street banks will turn down your mortgage application, even if you have a deposit. However, a VA loan company will still consider your application if you have shaky credit, and they won’t ask for a deposit. Just make sure you can afford the payments. Take a look at the VA Loan Calculator by WhatsMyPayment and make sure you can afford your payments. The last thing you want to do is make your credit score worse because of missed payments.
As you can imagine, the loan company has a limit to how much they are willing to lend to you. You can borrow up to a certain number without having to pay a deposit. If you want to borrow more than this amount, you can, but you will have to pay a deposit for the added amount.
A real estate agent may need proof of funds before taking your offer. If you can show a pre-approval for your VA loan, then that is often enough to have the realtor allow you to make your offer. This is very handy if you have found a tasty house for a good price and you want to move quickly.
The VA lender is going to appraise and check your house to see if it will hold its value. However, if the house is in disrepair, they may still agree to let you buy the house under one of two conditions. The first is if you can prove you have the funds and workers required to fix the problem. The second option is to borrow a little more from the VA company so that you may fix up the house and make it more energy efficient and/or valuable.
When you consider costs, interest, taxes, insurance, and all the other expenses that come with buying a house using a mortgage, it is quite possible to leave the house with some money, but make no actual net profit.
After you have paid off your first loan, you should be able to get a new loan. If you were eligible to start with, then you should still be eligible for a new loan. There are even some people who take out a loan, pay off most of it and then get another.
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